The VIN News Service recently conducted a Q&A session with the American Veterinary Medical Association and its indemnity arm, the Group Health and Life Insurance Trust (AVMA-GHLIT). The discussion explores the controversial partnership that’s emerged between GHLIT and Pets Best Insurance, a private entity.

When VCA Antech, Inc. bought MediMedia Animal Health and its Vetstreet.com business in July for $146 million, Vetstreet's data from nearly 5,000 practices moved under the same corporate umbrella as the nation's largest chain of stand-alone veterinary hospitals.

Vetstreet provides online marketing and client-communication services for veterinary practices. When a clinic signs up, it agrees to allow Vetstreet to upload its practice database, with all the details it contains on a practice's business operations: number of patient visits, care provided, sales of pharmaceuticals and so on.

For some veterinarians, having that information in the possession of a large corporation in direct competition with private practices was too much.

"VCA purchasing Vetstreet is a conflict of my interest to keep corporate veterinary hospitals out of my business," said Dr. Barbara Kempf, who runs a solo practice in Jacksonville, Fla. "As quickly as possible we will be dropping the previously awesome Vetstreet."

VCA says veterinarians need not worry.

"There are ... very strong privacy agreements," said Chief Executive Robert Antin in a conference call with analysts following the acquisition.

Vetstreet's contracts with its customers prohibit VCA from inspecting data from individual practices, said Doug Drew, VCA's vice president of strategic planning, in an interview. VCA would have access to practice data collected by Vetstreet only after it has been aggregated at a level high enough that the company could not discern anything about the performance of a single practice, Drew said.

The concerns expressed by Kempf and others arise in part because Vetstreet does more than just help practices communicate with their clients. It is also in the market research business, aggregating and analyzing the data from its thousands of customers and selling reports to companies in the veterinary industry, such as pharmaceutical makers. The information is valuable because it provides an up-to-date assessment of trends such as product sales from a large sample of clinics.

Under its contract with customers, Vetstreet must strip all identifying information on individual clients, pets and practices before aggregating and selling the data. The company also is in the process of setting up internal auditing procedures that will provide for third-party reviews of these privacy policies. Audit reports will be available on request, Drew said. He said the company has no intention of doing anything with the data collected by Vetstreet that could jeopardize its reputation.

"If individual animal hospitals don't have trust in us, then long-term we're not going to be successful as a company," he said.

Publicly traded VCA owns 540 animal hospitals nationwide, making it by far the largest chain of stand-alone veterinary clinics in the nation (Banfield Pet Hospital has more than 770 clinics, nearly all of which are located in PetSmart stores). VCA also runs diagnostics operations — Antech Diagnostics and the imaging company Sound-Elkin — which together do business with more than 60 percent of the nation's roughly 26,000 veterinary clinics. The company reported revenue of $1.38 billion in 2010.

Vetstreet's "Vetstreet Pro" product is one of several online marketing and communication services that aim to help veterinary practices attract and retain clients and increase patient visits. Competing services also upload practice databases as Vetstreet does, but none of the three contacted by the VIN News Service aggregate and sell customer data at this point.

The service ePetHealth, which is owned by Webster Veterinary, (https://www.webstervet.com/app.aspx ) a subsidiary of Patterson Companies, Inc., does not and will not aggregate and sell customer data, according to Director of Technology Matt Russell. "We feel very strongly that's not the direction we want to go," he said. Russell said ePetHealth saw an uptick in new subscriptions shortly after VCA's acquisition of Vetstreet was announced. He declined to provide information on the number of customers enrolled with the service, citing company confidentiality policies.

PetWise, run by McAllister Software Systems LLC, a subsidiary of Butler Schein Animal Health, does not currently market aggregated customer data. But Rob McAllister, senior director of project development at McAllister Software Systems, said the company may do so in the future, and that PetWise believes that "it is possible to create a data aggregation program that has a high ethical standard to guard our customers’ privacy and interests." PetWise does not disclose its customer count, but McAllister said it is in the hundreds.

ThinkPets, majority-owned by VCA's Antin, does not currently aggregate and sell customer data. However, such use is authorized in the company's privacy agreement with customers, according to Chief Executive Brian Tennyson. ThinkPets has roughly 3,000 ongoing independent animal hospital customers, Tennyson said.

The Veterinary Information Network (VIN), an online community for the profession, is pilot-testing a client-interaction package called PetSites, intended to compete with Vetstreet and similar services. PetSites will not aggregate and sell practice data, according to VIN Co-founder and President Dr. Paul Pion. The VIN News Service is the media arm of VIN.

Vetstreet's parent, MediMedia Animal Health, was privately held prior to the acquisition and did not disclose financial information. In a news release, VCA said it expects Vetstreet to generate revenue of $55 million to $65 million in 2012. Vetstreet's revenue grew 72 percent in 2010 and is expected to increase by more than 50 percent in 2011, according to the release. VCA announced the acquisition July 10, and the deal closed Aug. 9 after review by the Federal Trade Commission.

Despite VCA's assurances that clinic data won't be misused, several veterinarians said that the change of ownership nonetheless diminished their level of comfort with Vetstreet.

"It's not that I think VCA is the evil empire here," said Dr. Michael Goldmann, a veterinarian in Nanuet, N.Y. "But I think the temptation is too great for somebody, someday, to ... peek at my data." Other veterinarians expressed similar concerns in a discussion on VIN.

Drew encouraged veterinarians with such concerns about the privacy of their Vetstreet data to contact members of VCA's management team.

During the next several months, Drew said, VCA will be developing internal auditing protocols concerning the stewardship of Vetstreet data. The audit process will result in the preparation of a standard document known as a Service Organization Control (SOC) report. (The website of the American Institute of Certified Public Accountants gives information on such reports; VCA has not yet decided whether to follow the SOC 2 or SOC 3 protocol, Drew said.)

VCA has hired the accounting firm Deloitte to develop the auditing process. The actual audit will be conducted by the accounting firm KPMG. The first report is scheduled to be available late this year or early next year, Drew said. Meantime, the company is sending a form letter outlining the company's data security and confidentiality policies to veterinarians who contact Vetstreet to express concerns, Drew said.

VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email news@vin.com.